JCIT (OSD), New Delhi V. Sh. Prem Prakash Garg, New Delhi

ITA 2341/DEL/2011

• Counselvise Citation: 234120114 RSA 2011
• Duration Of Justice: 3 year(s) 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 15-01-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 09-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SANJEEV BAJAJ
• Assessee Lawyers: VIKRAM SAHAY
• Keywords: Unexplained investment; Business income; Principle of natural justice; Accommodation entries; Non compliance; Assessment record
• Section: 133A; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F , NEW DELHI) BEFORE SHRI H. S. SIDHU, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NOS.2341,2342 /DEL/2011 ASSESSMENT YEARS : 2004-05 & 2005-06 JCIT (OSD), VS. PREM PRAKASH GARG, N-41A, GALI NO.4, VIJAY VIHAR, UTTAM NAGAR, NEW DELHI. I.T.A.NOS. 4527,4528/DEL/2009 ASSESSMENT YEARS : 2004-05 & 2005-06 DCIT, CC-09, VS. PREM PRAKASH GARG, NEW DELHI N-41A, GALI NO.4, VIJAY VIHAR, UTTAM NAGAR, NEW DELHI. I.T.A.NOS.1888 & 1889/DEL/2011 ASSESSMENT YEAR 2004-05 & 2005-06 PREM PRAKASH GARG, VS. ACIT, CC-09, N-41A, GALI NO.4, NEW DELHI VIJAY VIHAR, UTTAM NAGAR, NEW DELHI. I.T.A.NOS.4551 & 4552/DEL/2009 ASSESSMENT YEAR 2004-05 & 2005-06 PREM PRAKASH GARG, VS. ACIT, CC-09, N-41A, GALI NO.4, NEW DELHI VIJAY VIHAR, UTTAM NAGAR, NEW DELHI. GIR / PAN:AADPG2169F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SANJEEV BAJAJ, ADV. RESPONDENT BY : SHRI VIKRAM SAHAY, SR. DR ORDER 2 ITA NOS.2341,2342/DEL/2011 I.T.A.NOS.4527,4528/DEL/2009 I.T.A.NOS.1888,1889/DEL/2011 I.T.A.NOS.4551,4552/DEL/2009 PER T.S. KAPOOR, AM: THIS IS A GROUP OF 8 APPEALS FILED BY ASSESSEE AS WELL AS BY REVENUE AGAINST SEPARATE ORDERS OF LD. CIT(A). I.T.A.NO. 4 527 & 4528/DEL/2009 ARE APPEALS FILED BY REVENUE AGAINST LD. CIT(A)S ORDER DATED 24.09.2009 RELATING TO ASSESSMENT YEARS 2004-05 & 2005-06 RESP ECTIVELY WHEREAS, I.T.A. NO. 4551 & 4552/DEL/2009 ARE THE APPEALS FIL ED BY ASSESSEE AGAINST LD. CIT(A)S ORDER DATED 24.09.2009. THESE FOUR AP PEALS RELATE TO QUANTUM ADDITIONS I.T.A. NO. 2341 AND 2342/DEL/2011 ARE APP EALS FILED BY REVENUE AGAINST LD. CIT(A)S ORDER DATED 18.02.2011 ON THE ISSUE OF PENALTY U/S 271(1)(C) . I.T.A.NOS. 1888 AND 1889/DEL/2011 ARE APPEALS FILED BY ASSESSEE AGAINST LD. CIT(A)S ORDER DATED 18.02.201 1. THESE APPEALS WERE HEARD TOGETHER, THEREFORE, FOR THE SAKE OF CONVENIE NCE A COMMON AND CONSOLIDATED ORDER IS BEING PASSED. 2. THE GROUNDS OF APPEAL TAKEN BY REVENUE AS WELL A S ASSESSEE ARE REPRODUCED BELOW: I) I.T.A.NO. 4527/DEL.2009 (ASSESSMENT YEAR 2004-05 ) REVENUES APPEAL: 1 (A) ON THE FACTS AND UNDER THE CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED IN REDUCING THE RATE OF ACCOMMO DATION CHARGES FROM 0.5% TO 0.05% WITHOUT SPECIFYING ANY BASIS FOR THE SAME. 1 (B) ON THE FACTS AND UNDER THE CIRCUMSTANCES OF THE CASE, LD CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.1 5 ,85,60,0001-., BEING THE TOTAL AMOUNT OF UNEXPLAINED CASH DEPOSIT IN THE ASSESEES BANK ACCOUNT ADMITTEDLY USED FOR HAWALA I ACCOMMODATION ENTRIES. 2. THE ORDER OF THE CIT(A) IS ERRONEOUS AND NOT TEN ABLE IN LAW AND ON FACTS. 3 ITA NOS.2341,2342/DEL/2011 I.T.A.NOS.4527,4528/DEL/2009 I.T.A.NOS.1888,1889/DEL/2011 I.T.A.NOS.4551,4552/DEL/2009 II) I.T.A.NO. 4528/DEL/2009 (ASSESSMENT YEAR 2005-0 6) REVENUES APPEAL: 1.(A) ON THE FACTS AND UNDER THE CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED IN DELETING THE ENTIRE ADDITION ON ACCOUNT OF OTHER COMMISSION INCOME OF RS.5.00 LAC WHILE OBSERVING THAT IN PRINCIPLE THE AO WAS CORRECT IN ESTIMATING THE INCOME FROM NO RMAL BUSINESS BASED ON THE RETURNS OF EARLIER YEAR. 1. (B) ON THE FACTS AND UNDER THE CIRCUMSTANCES OF THE CASE, LD. IT(A) HAS ERRED IN DELETING THE ADDITION OF RS.1 ,24,85,0 00/-., BEING THE TOTAL AMOUNT OF UNEXPLAINED CA H DEPOSIT IN THE ASSESSEES BANK ACCOUNT ADMITTEDLY USED FOR HAWALA I ACCOMMODATION ENTRIES. 4. THE ORDER OF THE CIT(A) IS ERRONEOUS AND NOT TE NABLE IN LAW AND ON FACT. III) I.T.A.NO. 4551/DEL/2009 (ASSESSMENT YEAR 2004- 05) ASSESSEES APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) [CI T(A)] IS BAD BOTH IN THE EYES OF LAW AND ON FACTS. 2. THAT THE LD. ASSESSING OFFICER ERRED IN PASSING EX-PARTE ORDER WITHOUT ANY BASE, PROPER EVIDENCES, ARBITRARY, AGAI NST THE MATERIAL AVAILABLE ON RECORDS, AGAINST THE PROVISIONS OF LAW & NATURAL JUSTICE. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN ESTIMATING COMMISSION OF RS.7,92,8001- [@ 0.5% OF RS 15,85,60,000/-] WITHOUT ANY BASE, MATERIAL ON RECOR D AND AGAINST THE STATEMENT RECORDED U/S 133A OF THE INCOME TAX ACT, 1961 IN THE SURVEY CARRIED ON MR. SANJAY KUMAR GARG. 4. (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DISTURBING THE ARHAT COMMISSION OF RS .1 ,04,582.03 BY WAY OF ENHANCING IT TO RS. 10,15,1001- AS 0.5% OF T URNOVER OF RS.20,30,20,105/- WITHOUT ANY BASE, MATERIAL ON REC ORDS AND AGAINST THE FACTS THAT TOO AGAINST STATEMENT OF MR. SANJAY KUMAR GARG RECORDED U/S 133A OF THE INCOME TAX ACT, 1961. (II) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LD. CIT(A) HAS ERRED IN CHARGING COMMISSION TWICE I.E. ONCE ON RS 15,85,60,000/- AS CASH DEPOSITED WHICH IS INCLUDED IN TURNOVER AND SE CONDLY ON RS. 4 ITA NOS.2341,2342/DEL/2011 I.T.A.NOS.4527,4528/DEL/2009 I.T.A.NOS.1888,1889/DEL/2011 I.T.A.NOS.4551,4552/DEL/2009 20,30,20,105/- ON TURNOVER AS ACCEPTED BY SALES TAX AUTHORITIES. IT IS DOUBLE TAXATION ON SAME INCOME. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN SUSTAINING THE ADDITION OF RS. 39,17,900/- AS UNEXPLAINED INVESTMENT WITHOUT ANY BASE AND MATERIAL ON RECORDS . IV) I.T.A.NO. 4552/DEL/2009 (ASSESSMENT YEAR 2005- 06) ASSESSEES APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) [CI T(A)] IS BAD BOTH IN THE EYES OF LAW AND ON FACTS. 2. THAT THE LD. ASSESSING OFFICER ERRED IN PASSING EX-PARTE ORDER WITHOUT ANY BASE, PROPER EVIDENCES, ARBITRARY, AGAI NST THE MATERIAL AVAILABLE ON RECORDS, AGAINST THE PROVISIONS OF LAW & NATURAL JUSTICE. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN ESTIMATING COMMISSION OF RS.62,425/- [@ 0. 50/0 OF RS 1,24,85,000/-] WITHOUT ANY BASE MATERIAL ON RECORD AND AGAINST THE STATEMENT RECORDED U/S 133A OF THE INCOME TAX ACT, 1961 IN THE SURVEY CARRIED ON MR. SANJAY KUMAR GARG. 4. (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DISTURBING THE ARHAT COMMISSION OF RS. 2,3 6,3401- BY WAY OF ENHANCING IT TO RS. 7,56,769/- AS 0.5% OF TURNOVER OF RS. 15,13,53,768/- WITHOUT ANY BASE, MATERIAL ON RECORD S AND AGAINST THE FACTS THAT TOO AGAINST STATEMENT OF MR. SANJAY KUMA R GARG RECORDED U/S 133A OF THE INCOME TAX ACT, 1961. (II) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LD. CIT(A) HAS ERRED IN CHARGING COMMISSION TWICE I.E. ONCE ON RS 15,85,60,000/- AS CASH DEPOSITED WHICH IS INCLUDED IN TURNOVER AND SE CONDLY ON RS. 20,30,20,105/- ON TURNOVER AS ACCEPTED BY SALES TAX AUTHORITIES. IT IS DOUBLE TAXATION ON SAME INCOME. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN SUSTAINING THE ADDITION OF RS. 3 .50 LACS AS INTEREST INCOME WITHOUT ANY BASE, MATERIAL ON RECORD AND JUST ON SU RMISES. 5 ITA NOS.2341,2342/DEL/2011 I.T.A.NOS.4527,4528/DEL/2009 I.T.A.NOS.1888,1889/DEL/2011 I.T.A.NOS.4551,4552/DEL/2009 V) I.T.A.NO. 2341/DEL/2011 (ASSESSMENT YEAR 2004-05 ) REVENUES APPEAL: '1. ON THE FACTS AND UNDER THE CIRCUMSTANCES OF TH IS CASE, THE LD CIT(A) HAS ERRED IN DIRECTING THE AO TO REVISE T HE AMOUNT OF PENALTY LEVIED U/S 271 (1)(C) ON THE BASIS OF THE T HEN LD CIT(A) ORDER IN THE QUANTUM CASE EVEN WHEN THE SAME WAS PENDING FOR HEARING BEFORE THE HON'BLE ITAT FOR WANT OF THE HON'BLE ITA T'S ORDER IN THE RELATED QUANTUM CASE OF SH. SANJAY KUMAR GARG. 2 THE ORDER OF THE CIT(A) IS ERRONEOUS AND NOT TEN ABLE IN LAW AND ON FACTS. VI) I.T.A.NO. 1881/DEL/2011 (ASSESSMENT YEAR 2004-0 5) ASSESSEES APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEAL) [CIT(A}] IS BAD BOTH IN THE EYES OF LAW AND ON FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN SUSTAINING PENALTY ON THE ADDITIONS MADE O N ESTIMATE, ADHOC ON THE BASIS OF STATEMENT OF THIRD PARTY AND WITHOU T ANY CONCRETE EVIDENCE OF CONCEALMENT AND MERE OPINION U/S 271(1} (C} OF THE INCOME TAX ACT, 1961. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A} ERRED IN SUSTAINING PENALTY WITHOUT AFFORDING REASO NABLE OPPORTUNITY AND AGAINST NATURAL JUSTICE WHILE NOT ALLOWING ADJO URNMENT. VII) I.T.A.NO. 2342/DEL/2011 (ASSESSMENT YEAR 2005- 06) REVENUES APPEAL: '1. ON THE FACTS AND UNDER THE CIRCUMSTANCES OF TH IS CASE, THE LD CIT(A) HAS ERRED IN DIRECTING THE AO TO REVISE THE AMOUNT OF PENALTY LEVIED U/S 271 (1 )(C) ON THE BASIS OF THE THEN LD CIT(A) ORDER IN THE QUANTUM CASE EVEN WHEN THE SAME WAS PENDING FOR HEA RING BEFORE THE HON'BLE ITAT FOR WANT OF THE HON'BLE ITA T'S ORDER IN THE RELATED QUANTUM CASE OF SH. SANJAY KUMAR GARG. 2 THE ORDER OF THE CIT(A) IS ERRONEOUS AND NOT TEN ABLE IN LAW AND ON FACTS. 6 ITA NOS.2341,2342/DEL/2011 I.T.A.NOS.4527,4528/DEL/2009 I.T.A.NOS.1888,1889/DEL/2011 I.T.A.NOS.4551,4552/DEL/2009 VIII) I.T.A.NO. 1889/DEL/2011 (ASSESSMENT YEAR 2005 -06), ASSESSEES APPEAL. 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEAL) [CIT(A}] IS BAD BOTH IN THE EYES OF LAW AND ON FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN SUSTAINING PENALTY ON THE ADDITIONS MADE O N ESTIMATE, ADHOC ON THE BASIS OF STATEMENT OF THIRD PARTY AND WITHOU T ANY CONCRETE EVIDENCE OF CONCEALMENT AND MERE OPINION U/S 271(1} (C} OF THE INCOME TAX ACT, 1961. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A} ERRED IN SUSTAINING PENALTY WITHOUT AFFORDING REASO NABLE OPPORTUNITY AND AGAINST NATURAL JUSTICE WHILE NOT ALLOWING ADJO URNMENT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSM ENT PROCEEDINGS FOR ASSESSMENT YEARS 2004-05 & 2005-06 WERE REOPENED U/ S 148 ON ACCOUNT OF THE FACT THAT THE CASE OF MR. SANJAY KUMAR GARG HAD BEEN REOPENED ON THE BASIS OF SPECIFIC INFORMATION OF INVESTIGATION WING THAT MR. SANJAY KUMAR GARG WAS RUNNING BUSINESS OF PROVIDING ENTRIES OF P URCHASES AND SALES TO VARIOUS BUSINESSMEN AND FOR THIS PURPOSE, HE HAD FL OATED VARIOUS FIRMS BY MAKING DIFFERENT PERSONS AS PROPRIETOR OF DIFFERENT FIRMS. THE ASSESSEES NAME WAS ALSO BEING USED AS PROPRIETORS OF ONE OF T HE FIRMS NAMELY BABA KISHORE ENTERPRISES AND THEREFORE, THE CASES OF ASS ESSEE WERE ALSO REOPENED. THE A.O. IN THE TWO YEARS MADE ADDITION OF RS.15.85 CRORES AND RS.1,24,85,000/- RESPECTIVELY ON ACCOUNT OF CASH DE POSITED BY ASSESSEE IN HIS BANK ACCOUNT IN THE NAME OF M/S. BABA KISHORE ENTER PRISES. THESE TWO ADDITIONS WERE MADE ON PROTECTIVE BASIS. THE A.O. FURTHER MADE ADDITION OF RS.8,71,320/- AND RS.7,56,769/- RESPECTIVELY ON ACC OUNT OF ACCOMMODATION CHARGES @ 0.5% ON TOTAL TURNOVER DECLARED BY ASSESS EE IN HIS SALES TAX 7 ITA NOS.2341,2342/DEL/2011 I.T.A.NOS.4527,4528/DEL/2009 I.T.A.NOS.1888,1889/DEL/2011 I.T.A.NOS.4551,4552/DEL/2009 RETURN. IN ASSESSMENT YEAR 2004-05, THE A.O. FU RTHER MADE ADDITION OF RS.53,27,050/- ON ACCOUNT OF PRINCIPAL AMOUNT OF FI XED DEPOSITS ON WHICH ASSESSEE HAD DECLARED INTEREST INCOME. THE A.O. IN ASSESSMENT YEAR 2005- 06 BESIDES ADDITION MADE ON ACCOUNT OF CASH DEPOSIT ED AND COMMISSION ON ACCOMMODATION ENTRIES ALSO MADE AN ADDITION OF RS.5 LACS ON ACCOUNT OF ESTIMATED BUSINESS AND OTHER INCOME. AGGRIEVED WI TH THE ASSESSMENT ORDERS, THE ASSESSEE FILED APPEALS BEFORE LD. CIT(A ). LD. CIT(A) DELETED THE ADDITION MADE BY A.O. ON ACCOUNT OF CASH DEPOSITED IN BANK ACCOUNT OF M/S. BABA KISHROE ENTERPRISES HOLDING THAT SUBSTANTIVE A DDITION WAS ALREADY CONSIDERED IN THE HANDS OF SHRI S.K. GARG. 4. HOWEVER INSTEAD OF ADDITIONS ON ACCOUNT OF CASH DEPOSITS HE MADE AN ADDITION EQUIVALENT TO 0.5% OF CASH DEPOSITED IN BA NK ACCOUNT BY RECORDING SIMILAR FINDINGS. FOR THE SAKE OF CONVENIENCE, FIN INGS AS RECORDED IN ASSESSMENT YEAR 2004-05 AND 2005-06 ARE REPRODUCED BELOW: (ASSESSMENT YEAR 2004-05): 3.3.6.1 HOWEVER, AS THE APPELLANT HAS BEEN INVOLV ED AND ASSOCIATED IN THE ENTIRE OPERATION OF PROVIDING ENTRY AS A SUB -COMMISSION AGENT AND AS ADMITTED BY SH. SANJAY KUMAR GARG ALSO IN HI S STATEMENT THAT HE IS PASSING ON, PART OF THE COMMISSION TO THE SUB 0-AAGENTS, IN MY OPINION, IT REQUIRES ESTIMATION OF COMMISSION INCOM E BASED ON SUCH CASH DEPOSIT IN THE HANDS OF HT APPELLANT. IN THE C ASE OF SH. SANJAY KUMAR GARG, THE COMMISSION HAS BEEN DIRECTED TO BE WORKED OUT @ 1%. THEREFORE, IN THE CASE OF THE APPELLANT, IT WI LL BE MOST FAIR AND REASONABLE TO ESTIMATE COMMISSION @ 0.5%. THUS, TH E COMMISSION SHOULD BE ESTIMATED AT RS,7,92,800/- (0.5% OF RS.15 ,85,60,000/-). (ASSESSMENT YEAR 2005-06): 3.1 IT IS SEEN THAT EXACTLY IDENTICAL ISSUES WERE I NVOLVED IN THE CASE OF THE APPELLANT ITSELF FOR ASSESSMENT YEAR 2004-05 AND ALMOST IDENTICAL GROUNDS WERE RAISED. THESE ISSUES HAVE B EEN DEALT WITH BY THE UNDERSIGNED BY MAKING DETAILED DISCUSSION IN MY ORDER FOR ASSESSMENT YEAR 2004-05 IN I.T.A. NO. 14/08-09 DAT ED 24.09.2009. 8 ITA NOS.2341,2342/DEL/2011 I.T.A.NOS.4527,4528/DEL/2009 I.T.A.NOS.1888,1889/DEL/2011 I.T.A.NOS.4551,4552/DEL/2009 IN THIS ORDER, THE ADDITION OF CASH DEPOSITED IN TH E BANK ACCOUNT WHICH WAS ADDED PROTECTIVELY WAS DIRECTED TO BE DELETED. ACCORDINGLY FOR THIS YEAR ALSO BASED ON THE SAME REASONING WHICH AR E NOT BEING REPEATED AGAIN FOR THE SAKE OF BREVITY, THE ADDITIO N OF RS.,1,24,85,000/- MADE BY THE A.O. ON PROTECTIVE BA SIS REPRESENTING THE CASH DEPOSITED IN THE BANK ACCOUNT DURING THE Y EAR IS DIRECTED TO BE DELETED. 3.2 HOWEVER, A.O. WAS DIRECTED IN THAT ORDER TO ADO PT COMMISSION @ 0.5% ON SUCH CASH DEPOSITS BEING SUB-BROKERAGE CO MMISSION FOR PROVIDING INTEREST. AS THE FACTS ARE EXACTLY IDENT ICAL IN THIS YEAR ALSO, AGAIN BASED ON THE SAME REASONING AS GIVEN IN MY AP PELLATE ORDER FOR ASSESSMENT YEAR 2004-05 IN I.T.A. NO. 14/08-09 DATE D 24.09.2009, THE A.O. IS DIRECTED TO MAKE SEPARATE ADDITION OF RS.62 ,425/- (BEING 0.5% OF RS.,1`,24,85,000/-). 5. AS REGARDS THE COMMISSION INCOME ESTIMATED BY A. O. ON THE BASIS OF TURNOVER DECLARED BY ASSESSEE IN HIS SALES TAX RETU RNS, THE LD. CIT(A) VIDE PARA 3.3.8 IN ASSESSMENT YEAR 2004-05 HAS HELD AS U NDER: 3.3.8. AS REGARDS ADDITION OF RS. 8,71,320/- WHICH HAS BEEN MADE @ .5% OF TOTAL SALES BASED ON SALES TAX ORDER, IN PRI NCIPLE THE ACTION OF AO IS UPHELD. HOWEVER CONSIDERING THE SUBMISSION OF THE APPELLANT THAT TURNOVER IS ACTUALLY RS. 20,30,20,105/- AS AGA INST RS. 17,42,63,958/- ADOPTED BY THE AO WHICH CONSISTS OF RS. 2,54,55,147/- TURNOVER OF TRADED RICE AND DALL AS SHOWN IN TRADIN G P&L ACCOUNT AS WELL AS AHRAT SALE OF RS. 17,75,64,957/- AND ON ARH AT SALE COMMISSION OF RS. 1,04,582/- HAS ALREADY BEEN SHOWN, F1,O IS D IRECTED TO COMPUTE THE COMMISSION @.05% ON TOTAL TURNOVER OF RS.20,30, 20,105/- WHICH COMES TO RS. 10,15,100/- AND GIVE CREDIT OF RS. 1,0 4,582/- WHICH IS THE AMOUNT OF COMMISSION ALREADY OFFERED. THUS THE ADDI TION ON THE ISSUE OF THIS COMMISSION SHOULD BE MADE AT RS. 9,10,518/- AS AGAINST RS. 8,71,320/- TAKEN BY THE AO. 6. THE LD. CIT(A) HAS THOUGH RECORDED THAT COMMISSI ON BE CALCULATED @ 0.05% OF TURNOVER BUT IN FACT HE CALCULATED THE SAM E @ 0.5% ONLY. IT SEEMS 9 ITA NOS.2341,2342/DEL/2011 I.T.A.NOS.4527,4528/DEL/2009 I.T.A.NOS.1888,1889/DEL/2011 I.T.A.NOS.4551,4552/DEL/2009 THAT HE MENTIONED 0.05% BY MISTAKE AS IN ASSESSMENT YEAR 2005-06 THERE ARE CLEAR FINDINGS AS PER PARA 3.3 OF HIS ORDER WHI CH ARE REPRODUCED BELOW: 3.3. AS REGARDS ESTIMATION OF ACCOMMODATION CHARGE S @ 0.5% ON TOTAL TURNOVER AS PER SALES TAX ORDER, THE ACTION O F A.O. OF CHARGING ACCOMMODATION CHARGE @ 0.5% HAS BEEN UPHELD IN PRIN CIPLE IN MY APPELLATE ORDER FOR A.Y. 2004- 05 IN ITA NO. 14/08- 09 DATED 24.09.2009. THE A.O. WAS ALSO DIRECTED TO GIVE CRED IT OF COMMISSION A READY OFFERED BY THE APPELLANT IN ITS P&L ACCOUNT O N THIS ACTIVITY. HOWEVER, IN THIS YEAR AS THE APPELLANT HAS NOT FILE D RETURN OF INCOME, NO REDUCTION IS TO BE GIVEN. THUS THE ADDITION OF R S. 7,56,769/- IS UPHELD. 7. AS REGARDS THE ADDITION OF RS.53,27,050/- MADE B Y A.O. IN ASSESSMENT YEAR 2004-05 ON ACCOUNT OF UNDISCLOSED P RINCIPAL AMOUNT OF FIXED DEPOSITS, LD. CIT(A) GAVE RELIEF OF RS.14,09, 150/- ON THE BASIS THAT THE INVESTMENT IN FIXED DEPOSITS FOR THIS AMOUNT WA S NOT MADE IN THE YEAR UNDER CONSIDERATION. 8. AS REGARDS ADDITION OF RS.5 LACS MADE BY A.O. IN ASSESSMENT YEAR 2005-06, LD. CIT(A) REDUCED THE AMOUNT OF INCOME TO RS.3.5 LACS BY HOLDING AS UNDER: I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT. IT IS ADMITTED FACT THAT RETURN OF INCOME WAS NOT FILED BY THE APPELLAN T AND SO IS THE TAX AUDIT REPORT. THERE WAS TOTAL NON COMPLIANCE DURING ASSESSMENT PROCEEDINGS. THEREFORE, IT IS HELD IN PRINCIPLE THE , A..O. WAS CORRECT IN ESTIMATING THE INCOME FROM NORMAL BUSINESS BASED ON THE RETURNS OF EARLIER YEARS. HOWEVER, IN VIEW OF THE FACTS OF THE CASE AS PRESENTED NOW AND ALSO CONSIDERING THE RETURN FILED AS WELL A S ASSESSMENT ORDERS OF THE EARLIER YEARS, IN MY OPINION AT THIS STAGE NO FURTHER ADDITION IS CALLED FOR FROM THE BUSINESS ACTIVITIES , HOWEVER IT IS NOTICED THAT IN AY. 2004-05, INTEREST INCOME OF RS . 3,19,623/- HAS BEEN OFFERED. NO EVIDENCE HAS BEEN PRODUCED EITHER BEFORE A.O. OR BEFORE UNDERSIGNED TO ESTABLISH THAT THESE INVESTME NTS ARE NO MORE THERE WITH THE APPELLANT DURING THIS YEAR. THEREFOR E, IT WILL BE FAIR AND 10 ITA NOS.2341,2342/DEL/2011 I.T.A.NOS.4527,4528/DEL/2009 I.T.A.NOS.1888,1889/DEL/2011 I.T.A.NOS.4551,4552/DEL/2009 REASONABLE IF INTEREST INCOME IS ESTIMATED AT RS. 3 .5 LAKHS DURING THIS YEAR. THUS, THE ESTIMATED ADDITION OF RS. 5 LAKH MA DE BY THE A.O. IS RESTRICTED TO RS. 3.5 LAKH. THE APPELLANT GET RELIE F OF RS.1.5 LAKH ON THIS GROUND. 9. IN VIEW OF ABOVE, ORDER OF LD. CIT(A), BOTH THE PARTIES ARE IN APPEAL BEFORE US. 10. AT THE OUTSET, LD. A.R. SUBMITTED THAT LD. CIT( A) INSTEAD OF ALLOWING RELIEF TO THE ASSESSEE ON ACCOUNT OF ALLEGED COMMIS SION INCOME, HAS IN FACT INCREASED THE AMOUNT OF ADDITION BY MAKING ANOTHER ADDITION OF COMMISSION ON THE BASIS OF CASH DEPOSITED IN BANK ACCOUNT. IT WAS SUBMITTED THAT IN THE CASE OF SHRI S. K. GARG, THE ENTIRE ADDITION WAS MA DE INCLUDING THE ENTRIES IN THE BANK ACCOUNT OF ASSESSEE AND IN THIS RESPECT, C OPY OF THE TRIBUNAL ORDER IN THE CASE OF SHRI S. K. GARG FOR ASSESSMENT YEAR 200102 TO 2005-06 IN I.T.A.NOS.1501, 1502, 3531-3534/DEL/2009 WERE REFER RED. IT WAS SUBMITTED THAT THE HONBLE TRIBUNAL IN THE CASE OF SHRI S. K. GARG, HAD ARRIVED AT THE CONCLUSION THAT SHRI S.K. GARG WAS AN ENTRY OPERATO R AND HAD DELETED THE ADDITIONS ON ACCOUNT OF CASH DEPOSITS AND HAS FURTH ER HELD THAT ASSESSEE HAS EARNED A COMMISSION OF RS.0.25 PAISA ON ENTIRE DEPO SITS IN THE BANK ACCOUNT OF VARIOUS FIRMS UNDER THE NAMES OF VARIOUS PERSONS . THE LD. A.R. FURTHER SUBMITTED THAT IN THE SAME ORDER, THE ARGUMENT OF A SSESSEE THAT HE HAD PASSED ON 10 PAISE TO THE PERSON IN WHOSE NAME THE ACCOUNT S WERE BEING MAINTAINED, WAS NOT CONSIDERED AND THE ENTIRE 25 PA ISE WAS TAXED IN HIS HANDS AFTER GIVING A REBATE OF 5 PAISE FOR OTHER EX PENSES. IN VIEW OF THE ABOVE, IT WAS SUBMITTED THAT SINCE THE TRIBUNAL HAS HELD THAT NOTHING HAD BEEN PASSED ON TO THE PERSON IN WHOSE NAME THE FIRM WAS BEING OPERATED, THEREFORE, THE ADDITION IN THE HANDS OF ASSESSEE CA NNOT BE MADE. IT WAS 11 ITA NOS.2341,2342/DEL/2011 I.T.A.NOS.4527,4528/DEL/2009 I.T.A.NOS.1888,1889/DEL/2011 I.T.A.NOS.4551,4552/DEL/2009 FURTHER SUBMITTED THAT THE COMMISSION INCOME UPHELD BY LD. CIT(A) ON THE BASIS OF TURNOVER DECLARED IN SALES TAX RETURN OF A SSESSEE DESERVES TO BE DELETED AS THE ENTRIES IN THE BANK ACCOUNT REPRESEN TS TURNOVER ALSO AND, THEREFORE, BOTH THE ADDITIONS WILL AMOUNT TO DOUBLE ADDITION. 11. AS REGARDS THE ADDITION ON ACCOUNT OF UNDISCLOS ED PRINCIPAL AMOUNT OF FIXED DEPOSITS, LD. A.R. ARGUED THAT THE PRINCIPAL AMOUNT WAS NOT FROM UNDISCLOSED SOURCES BUT THE SAME WAS MADE FROM THE BANK ACCOUNT OF THE ASSESSEE, WHICH WERE ALSO AVAILABLE WITH A.O. AND, THEREFORE, IT CANNOT BE SAID THAT THE FD WERE MADE FROM UNDISCLOSED SOURCES . 12. AS REGARDS UPHOLDING OF ADDITION OF RS.3.5 LACS IN ASSESSMENT YEAR 2005-06, LD. A.R. SUBMITTED THAT THE ADDITION WAS C ONFIRMED WITHOUT ANY BASIS AND NEEDS TO BE DELETED. 13. LD. D.R. ON THE OTHER HAND STRONGLY ARGUED THA T THE ADDITION IN THE HANDS OF SHRI S. K. GARG FOR ASSESSMENT YEAR 2004-0 5, WERE DELETED ON ACCOUNT OF TECHNICAL REASONS BY QUASHING OF ASSESSM ENT ORDER BY THE TRIBUNAL AND HENCE, NOTHING WAS MADE TAXABLE IN THE HANDS OF SHRI S K GARG AND IN VIEW OF THIS, THE PROTECTIVE ASSESSMENT MADE IN THE HANDS OF ASSESSEE NEEDS TO BE CONFIRMED. 14. AS REGARDS THE ARGUMENT OF LD. A.R. THAT ADDITI ON OF COMMISSION HAD BEEN MADE IN THE CASE OF SHRI S. K. GARG, LD. D.R. SUBMITTED THAT LD. CIT(A) HAS DELETED THE HUGE AMOUNT OF ADDITION MADE ON ACCOUNT OF CASH DEPOSITED IN THE BANK ON THE BASIS OF DECISION IN T HE CASE OF S. K. GARG WHEREIN ADDITION ON ACCOUNT OF CASH DEPOSITED WERE DELETED AND 1% COMMISSION ON THESE CASH DEPOSITED WERE UPHELD BY L D. CIT(A) AND, THEREFORE, THE UPHOLDING OF 0.5% OF CASH DEPOSIT IN THE CASE OF ASSESSEE IS QUITE REASONABLE. 12 ITA NOS.2341,2342/DEL/2011 I.T.A.NOS.4527,4528/DEL/2009 I.T.A.NOS.1888,1889/DEL/2011 I.T.A.NOS.4551,4552/DEL/2009 15. REGARDING ARGUMENT OF LD. A.R. THAT THE ADDITIO N OF COMMISSION INCOME HAS BEEN MADE TWICE, LD. D.R. SUBMITTED THAT 0.5% COMMISSION HAS BEEN MADE BY LD. CIT(A) IN VIEW OF CASH DEPOSIT IN ACCORDANCE WITH CASE LAW OF SHRI S K GARG AS DECIDED BY LD. CIT(A) WHERE AS HE HAS UPHELD THE ADDITION MADE BY A.O. @ 0.5% OF TURNOVER OF ASSESSE E AS DECLARED BEFORE SALES TAX AUTHORITIES. 16. REGARDING ADDITION CONFIRMED BY LD. CIT(A) ON A CCOUNT OF CONCEALED AMOUNT OF FD, LD. D.R. RELIED UPON THE ORDER OF LD. CIT(A). 17. AS REGARDS THE PENALTY APPEALS, LD. A.R. SUBITT ED THAT THE PENALTY WAS IMPOSED BY A.O. AND LD. CIT(A) HAS GIVEN PART RELIE F ON ACCOUNT OF PENALTY IN VIEW OF HIS PART RELIEF IN HIS QUANTUM ORDER. T HEREFORE, IT WAS SUBMITTED THAT THE PENALTY ORDER CAN FOLLOW THE QUANTUM APPEA LS AS DECIDED BY HON BLE TRIBUNAL. 18. LD. D.R. AGREED THAT PENALTY APPEALS CAN FOLLOW TRIBUNAL ORDERS. 19. WE HAVE HEARD RIVAL PARTIES AND HAVE GONE THROU GH THE MATERIAL PLACED ON RECORD. WE FIND THAT IN THE CASE OF SHRI S K G ARG, THE ENTIRE ADDITION OF CASH DEPOSITED IN BANK ACCOUNT OF VARIOUS FIRMS INC LUDING THAT IN THE NAME OF ASSESSEE WAS CONSIDERED IN HIS HANDS. HOWEVER IN T HAT CASE, THE TRIBUNAL HAD AGREED WITH THE VIEW OF LD. CIT(A) THAT THE ADD ITION ON ACCOUNT OF ENTIRE CASH COULD NOT BE MADE AND, THEREFORE, THE T RIBUNAL HAD ESTIMATED THE COMMISSION INCOME ON SUCH DEPOSITS. WHILE ESTIMATI NG THE COMMISSION INCOME, LD. CIT(A) HAD CONFIRMED THE ADDITION EQUIV ALENT TO 1% OF DEPOSITS, WHEREAS HONBLE TRIBUNAL REDUCED IT TO 0. 2%. THEREFORE, PRINCIPALLY, THE CASH DEPOSITS OF ASSESSEE FIRM WER E CONSIDERED IN THE HANDS OF SHRI S K GARG. THE TRIBUNAL HAS ALSO HELD THAT NOTHING WAS ON RECORD TO PROVE THAT 10 PAISE OF TURNOVER HAD TRAVELLED IN TH E HANDS OF PERSON IN WHOSE 13 ITA NOS.2341,2342/DEL/2011 I.T.A.NOS.4527,4528/DEL/2009 I.T.A.NOS.1888,1889/DEL/2011 I.T.A.NOS.4551,4552/DEL/2009 NAMES THE FIRMS WERE FLOATED. THE FINDINGS OF TRIB UNAL FOR ASSESSMENT YEAR 2005-06 AS CONTAINED IN PARA 63 ARE REPRODUCED BELO W: 63. THE NEXT ISSUE ARISES FOR ESTIMATION OF COMMISS ION INCOME. IN THE STATEMENT THE ASSESSEE AT THE TIME OF SURVEY UN DER SECTION 133A HAD STATED THAT HE CHARGED 25P AS COMMISSION FOR PR OVIDING ACCOMMODATION ENTRIES AND OUT OF THAT 25P HE PAID 1 0P TO OTHERS IN WHOSE NAME BANK ACCOUNTS WERE MAINTAINED AND 5P WAS SPENT ON EXPENSES INCURRED IN RELATION .SUCH BUSINESS AND HE NCE. NET COMMISSION EARNED WAS 10P I.E. 0.10 PER CENT. THE L D. CIT (A) HAD TAKEN THE COMMISSION AT 1 PER CENT AS AGAINST 1.75% APPLIED BY THE ASSESSING OFFICER FOR WHICH NO EVIDENCE DURING THE COURSE OF SURVEY WAS FOUND. THE LD. CIT (A) HAS ALSO NOTED THAT THER E WAS NO CLEAR STANDARD RATE OF COMMISSION FOR ACCOMMODATION ACTIV ITIES. ACCORDING TO HIM THE PEOPLE WHO ARE ENGAGED IN THIS TYPE OF B USINESS WOULD NOT CHARGE LESS THAN 1 PER CENT ON THE BILL AMOUNT AS D ONE IN THE CASE OF BROKERAGE ON REAL ESTATE BUSINESS. HE FURTHER OBSER VED THAT THE RATE OF 1 PER CENT COMMISSION IS VERY REASONABLE. NOW THE I SSUE ARISES AS TO WHETHER THE COMMISSION SHOULD BE ESTIMATED AT THE R ATE OF .01 PER CENT OR L. 75 PER CENT OR 1 PER CENT. THE LD. CIT (A) FO R ARRIVING AT THE RATE OF COMMISSION EARNED HAS RELIED ON RATE OF COMMISSI ON NORMALLY CHARGED IN CASE OF REAL ESTATE TRANSACTIONS. IN REA L ESTATE TRANSACTIONS THE BROKER HAS TO IDENTIFY THE SUITABLE BUYER/PURCH ASER, INSPECTION OF PROPERTY, VISIT OF INTERESTED PARTIES, NEGOTIATIONS OF RATES, REGISTRATION OF SALE DEEDS ETC. WHEREAS IN CASE OF BOGUS ENTRIES PROVIDERS NO SUCH ACTIVITIES ARE INVOLVED. INTERESTED PARTY GIVES CA SH TO ENTRY PROVIDER WHICH IS DEPOSITED IN BANK ACCOUNT AND HE ENTRY PRO VIDER ISSUES CHEQUE. HENCE THE TRANSACTIONS OF BOGUS ENTRY PROVI DERS CANNOT BE COMPARED WITH THE TRANSACTIONS OF REAL ESTATE BUSIN ESS TRANSACTIONS. HE HAS TO ENSURE THE NATURE OF THE PROPERTY AND HAS TO SATISFY BOTH SELLER AND PURCHASER. THE SERVICES RENDERED BY THE BROKERS IN REAL ESTATE TRANSACTIONS ARE MORE THAN THE ENTRY PROVIDE RS. HENCE BOTH THE TRANSACTIONS ARE NOT COMPARABLE. THEREFORE, THE COM PARISON OF COMMISSION EARNED ON A REAL ESTATE TRANSACTION, WHI CH IN FACT TAKES PLACE AND COMMISSION ON TRANSACTION WHICH DOES NOT AT ALL OCCUR, ARE NOT COMPARABLE. IN ACCOMMODATION ENTRIES, THE TRA NSACTION DOES NOT TAKE PLACE AND, THEREFORE, COMMISSION WILL BE CERTA INLY LOWER THAN THE COMMISSION II1 THE CASE OF REAL ESTATE OR REAL TRAN SACTION. MOREOVER, NEITHER THE LD. CIT (A) NOR THE AO HAD GIVEN ANY CO MPARABLE CASE 14 ITA NOS.2341,2342/DEL/2011 I.T.A.NOS.4527,4528/DEL/2009 I.T.A.NOS.1888,1889/DEL/2011 I.T.A.NOS.4551,4552/DEL/2009 WHEREIN COMMISSION AT THE RATE OF 1.75 PER CENT AS TAKEN BY THE AO OR 1 PER CENT ADOPTED BY THE LD. CIT(A) HAS BEEN ADMIT TED BY OTHER ASSESSEES ENGAGED IN BUSINESS OF BOGUS PROVIDER. T HEREFORE, IN THE ABSENCE OF ANY SUCH MATERIAL ON RECORD, THE STATEME NT GIVEN BY THE ASSESSEE ON OATH DURING THE COURSE OF SURVEY PROCEE DINGS HAS TO BE GIVEN CREDENCE. THE ASSESSEE HAS FLOATED THE BOGUS CONCERNS AND HAS CONTROLLED THE ACCOUNTS. DURING THE COURSE OF SURVE Y, NO MATERIAL WAS FOUND ON THE BASIS OF WHICH IT COULD BE SAID THAT T HE ASSESSEE HAD PASSED ON .1 PER CENT COMMISSION TO THE PERSONS IN WHOSE NAMES THE BANK ACCOUNTS WERE MAINTAINED. IN THE ABSENCE OF AN Y EVIDENCE HAVING BROUGHT ON RECORD, WE ARE UNABLE TO AGREE WI TH THE ASSESSEE THAT THE ASSESSEE HAD PASSED ON COMMISSION OF LOP T O THE PERSONS IN WHOSE NAMES DUMMY CONCERNS WERE FLOATED. HOWEVER IN THE BUSINESS OF ENTRY PROVIDER CERTAIN EXPENDITURE HAS TO BE INC URRED WHICH HAS BEEN STATED TO BE 5P DURING THE COURSE OF SURVEY. T HEREFORE, CREDIT OF SP OUT OF 2SP RECEIVED AS COMMISSION HAS TO BE ALLO WED. THEREFORE, THE ASSESSING OFFICER IS DIRECTED TO ESTIMATE COMMI SSION INCOME BY APPLYING 0.2% NET COMMISSION ON TURNOVER DETERMINED BY THE LD CIT (A) FOR BOTH THE ASSESSMENT YEARS AS AGAINST 1 % TA KEN BY HIM. 20. FOR THE ASSESSMENT YEAR 2004-05, NO SUCH FINDIN GS WERE MADE AS THE HONBLE TRIBUNAL HAD QUASHED THE ASSESSMENT ORDER B ECAUSE OF LIMITATION ISSUES. THE FINDINGS OF TRIBUNAL IN ASSESSMENT YE AR 2005-06 CANNOT BE APPLIED TO ASSESSMENT YEAR 2004-05, AS TRIBUNAL HAD MADE A CATEGORICAL FINDING IN ASSESSMENT YEAR 2005-0-6 WHEREAS IN ASSE SSMENT YEAR 2004-05, NO SUCH FINDING WAS MADE, THEREFORE, INCOME IN THIS YEAR HAS TO BE ESTIMATED ON THE BASIS OF STATEMENT OF SHRI S. K. GARG WHICH SAYS THAT 10 PAISE WAS PASSED ON TO THE ASSESSEE. THEREFORE, WE ORDER THA T 10 PAISE OF TURNOVER BE ASSESSED IN THE HANDS OF ASSESSEE FOR ASSESSMENT YE AR 2004-05. IN VIEW OF ABOVE, GROUND NO.3 IN I.T.A.NO. 4551/DEL/2009 IS PA RTLY ALLOWED AND A.O. IS DIRECTED TO ASSESS COMMISSION INCOME @ 10 PAISE INSTEAD OF 50 PAISE HOWEVER, IN ASSESSMENT YEAR 2005-06 IN I.T.A.NO. 45 52/DEL/2009, GROUND 15 ITA NOS.2341,2342/DEL/2011 I.T.A.NOS.4527,4528/DEL/2009 I.T.A.NOS.1888,1889/DEL/2011 I.T.A.NOS.4551,4552/DEL/2009 NO.3 IS ALLOWED. IN CONSEQUENCE, WE DISMISS GROUND NO.1(A) AND 1(B) IN I.T.A.NO. 4527/DEL/2009 AND GROUND NO.1(B) IN I.T. A.NO. 4528/DEL/2009. 21. AS REGARDS THE ADDITION CONFIRMED BY LD. CIT(A) @ 0.5% OF TURNOVER, WE FIND THAT THE A.O. HAD MADE THIS ADDITION ON THE BASIS OF TURNOVER DECLARED BY ASSESSEE IN HIS SALES TAX RETURNS AS HE HELD THAT A SUB-BROKER LIKE ASSESSEE ON THE BASIS OF STATEMENT OF SHRI NARESH K UMAR GOEL PROP. MAHADEV ENTERPRISES WAS GETTING 40-55 PAISE / QTL. ON THE TURNOVER AND THEREFORE HE ESTIMATED THE INCOME @ 0.5%. LD. CIT( A) HAS UPHELD THE SAME. HOWEVER, HE HAD INCREASED THE AMOUNT OF ADDI TION IN ASSESSMENT YEAR 2004-05 ON THE BASIS OF SUBMISSIONS OF APPELLA NT THAT TURNOVER OF ASSESSEE WAS MORE AS AGAINST ADOPTED BY A.O. THE ARGUMENT OF LD. A.R. THAT IT IS A DOUBLE ADDITION, DOES NOT HOLD ANY FOR CE BECAUSE OF THE FACT THAT LD. CIT(A) HAD MADE THE ADDITION EQUIVALENT TO 0.5% OF CASH DEPOSITS IN LIEU OF DELETION OF ADDITION ON ACCOUNT OF CASH DEP OSITS IN BANK, WHEREAS THE ADDITION @ 0.5% OF TURNOVER IS BASED UPON THE TURNO VER OF ASSESSEE. THESE ARE SEPARATE ADDITIONS. IN THIS COMMERCIAL WORLD, IT IS NOT POSSIBLE THAT A PERSON WILL ALLOW USE OF HIS NAME FOR MAKING DUBIOU S TRANSACTIONS. MOREOVER, THE ADDITION WAS MADE BY A.O. ON THE BASI S OF RATE PREVALENT IN THE MARKET FOR GIVING / RECEIVING BOGUS BILLS. THI S ADDITION HAS BEEN MADE AND SUSTAINED BY LD. CIT(A) ON ENTIRELY DIFFERENT F OOTING. WE FIND THAT THE ESTIMATION OF COMMISSION INCOME ON THE BASIS OF TUR NOVER OF ASSESSEE DECLARED IN S ALES TAX RETURNS HAS BEEN RIGHTLY CON FIRMED BY LD. CIT(A). THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDE R OF LD. CIT(A). 22. IN VIEW OF ABOVE, GROUND N.4 OF ASSESSEES APPE ALS IN I.T.A. NOS. 4551/DEL/2009 AND 4552/DEL/2009 IN BOTH THE YEARS, IS DISMISSED. 16 ITA NOS.2341,2342/DEL/2011 I.T.A.NOS.4527,4528/DEL/2009 I.T.A.NOS.1888,1889/DEL/2011 I.T.A.NOS.4551,4552/DEL/2009 23. NOW, COMING TO GROUND NO.5 IN ASSESSMENT YEAR 2 004-05, WE FIND THAT ON THE BASIS OF INTEREST INCOME DECLARED BY AS SESSEE, THE A.O. HAD ARRIVED AT THE AMOUNT OF PRINCIPAL OF FD ON THE BAS IS OF INTEREST @ 6% WHEREAS LD. CIT(A) HAS ALLOWED PART RELIEF TO THE A SSESSEE ON THE BASIS OF THE FACT THAT SOME FDS WERE NOT RELATED TO THE YEA R UNDER CONSIDERATION. THE RELEVANT PART OF THE ORDER OF LD. CIT(A) IS REP RODUCED BELOW: 4.3.1 I HAVE CONSIDERED THE FACTS OF THE CASE. SU BMISSIONS OF THE APPELLANT HAVE ALSO BEEN GONE THROUGH VERY CAREFULL Y. THE ASSESSMENT RECORDS OF EARLIER YEAR HAS ALSO BEEN V ERIFIED. AS REGARDS CONTENTION OF THE APPELLANT THAT FDS BELONG TO EARL IER YEAR WHICH IS EVIDENCED AS PER AO'S ORDER ITSELF WHERE IN PARA 10 HE HAS REFERRED THE TOS CERTIFICATE OF EARLIER YEAR, I FAIL TO AGRE E WITH THE APPELLANT. THE REFERENCE OF A.O. IS ONLY FOR THE RATE OF INTER EST AND NOT FOR THE EXISTENCE OF FDS. EVEN OTHERWISE ON GOING THROUGH T HE RETURN OF THE APPELLANT FOR A.Y. 2003-04, IT IS SEEN THAT IN ITS BALANCE SHEET IT HAS SHOWN INVESTMENT OF RS. 5 LAKH. THIS IS NOTHING BUT THE FIXED DEPOSIT WITH SBBJ AS IS VERY CLEAR WITH THE CERTIFICATE DAT ED 14.8.2003 FROM SBBJ AS PER WHICH THIS FD IF/AS MADE ON 7.1.2003 AN D THE INTEREST RATE APPLICABLE TO SAID FD WAS 6%. THE MATURITY DAT E OF THIS FO WAS 7.1.2004. FURTHER, THE APPELLANT WAS HAVING DEPOSIT WITH CHHAJU RAM GOVIND RAM ALSO IN PREVIOUS YEAR RELEVANT TO THE AY . 2003-04. THE INTEREST RECEIVED FROM SUCH DEPOSIT WAS OFFERED TO TAX BY THE APPELLANT. THERE WAS NO OTHER DEPOSIT IN EARLIER YE AR. THE INTEREST INCOME OFFERED ALSO WAS RS. 53,071/- ONLY WHICH COM PRISED INTEREST FROM CHHAJU RAM COVIND RAM BEING RS. 46,249/- AND B ANK INTEREST OF RS. 6,822/- WHICH IS NOTHING BUT INTEREST ON FD FRO M SBBJ. THEREFORE, ON PERUSAL OF THESE FACTS IT IS VERY CLEAR THAT THE ADDITION ON ESTIMATION BASIS ON INVESTMENT IN THE CASE OF CHHAJU RAM GOVIN D RAM WHICH COMES TO RS. 8,97,700/- IS NOT JUSTIFIED AS THIS IS AN OLD BALANCE. AS REGARDS INTEREST FROM SBBJ AS WELL AS SYNDICATE BAN K, I HAVE GONE THROUGH THE TDS CERTIFICATE FILED ALONG WITH THE RE TURN OF INCOME FOR AY. 2004-05. ONE TDS CERTIFICATE IS DATED 13.2.200/ ~ AND THIS PERTAINS TO INTEREST CREDIT OF RS. 30,682/-. THIS I NTEREST IS PERTAINING TO THE SAME FD OF RS 5 LAKH WHICH WAS TAKEN IN EARLIER YEAR WHOSE DATE OF MATURITY WAS 7.1.2004. THEREFORE, NO ADDITION DU RING THIS YEAR OF INVESTMENT ON WHICH SUCH INTEREST INCOME IS EARNED IS JUSTIFIED. 17 ITA NOS.2341,2342/DEL/2011 I.T.A.NOS.4527,4528/DEL/2009 I.T.A.NOS.1888,1889/DEL/2011 I.T.A.NOS.4551,4552/DEL/2009 4.3.2. HOWEVER, REGARDING REMAINING INTEREST REC EIPT OF RS. 2,33,079/- ON WHICH TDS HAS BEEN CIARR.EC, I IS VER Y CLEAR THAT INVESTMENT IR, FDS HAS BEEN MADE DURING THIS YEA: O NLY. THE INTEREST RATE APPLICABLE IS ALSO 6%. THEREFORE, TO THAT EXTE NT THE INVESTMENT HAS TO BE WORKED OUT WHICH COMES TO RS. 39,17,900/- (AP PROX.) !J.,S THE APPELLANT DID NOT OFFER ANY EXPLANATION ABOUT THE S OURCE OF ACQUISITION OF THESE DEPOSITS IN THE ASSESSMENT PROCEEDINGS OR TO THE UNDERSIGNED DURING APPELLATE PROCEEDINGS, THE ADDITION TO THE E XTENT AS UNEXPLAINED INVESTMENT HAS TO BE SUSTAINED. THUS TH E ADDITION IS DIRECTED TO BE RESTRICTED 0 RS. AS, 17,900/-. THE A PPELLANT GETS RELIEF OF RS. 14,09, 150/-. 24. LD. CIT(A)S FINDING IN THIS RESPECT ARE QUITE EXHAUSTIVE AND WE DO NOT FIND ANY INFIRMITY IN THE SAME EXCEPT TO THE EX TENT THAT ADDITION CONFIRMED BY US ON THE BASIS OF TURNOVER OF ASSESSE E NEEDS TO BE GIVEN BENEFIT OF TELESCOPING. THEREFORE, ADDITION TO THA T EXTENT AMOUNTING TO RS.9,10,518/- SHOULD BE REDUCED FROM ADDITION OF RS .39,17,900/- AS FIXED DEPOSITS TO THE EXTENT OF RS.9,10,518/- CAN BE ATTR IBUTED TO THIS INCOME. IN VIEW OF ABOVE, GROUND NO.5 IN I.T.A. NO. 4551/DEL/2 009 IS PARTLY ALLOWED. 25. GROUNDS NO.1 & 2 IN I.T.A. NO. 4551/DEL/2009 AN D I.T.A.NO. 4552/DEL/2009 ARE GENERAL AND DO NOT REQUIRE ANY AD JUDICATION. 26. IN I.T.A. NO. 4552/DEL/2009, GROUND NO.3 HAS AL READY BEEN ALLOWED WHEREAS GROUND NO.4 IS DISMISSED. GROUND NO.5 RELA TES TO SUSTENANCE OF ADDITION OF RS.3.50 LACS. WE FIND THAT LD. CIT(A) HAS UPHELD THE ADDITION WITHOUT ANY BASIS OR MATERIAL AND THEREFORE, THE SA ME IS DELETED. IN VIEW OF ABOVE, GROUND N.5 IN I.T.A. NO. 4552/DEL/2009 IS AL SO ALLOWED. 27. IN VIEW OF THE ABOVE APPEALS IN I.T.A.NOS.4551 AND 4552/DEL/2009 ARE PARTLY ALLOWED AS DISCUSSED ABOVE. 18 ITA NOS.2341,2342/DEL/2011 I.T.A.NOS.4527,4528/DEL/2009 I.T.A.NOS.1888,1889/DEL/2011 I.T.A.NOS.4551,4552/DEL/2009 28. AS REGARDS REVENUES APPEAL IN I.T.A. NO. 4527/ DEL/2009, WE FIND THAT GROUND NO.1 (A) DOES NOT ARISE FROM LD. CIT(A) S ORDER AS HE HAS CALCULATED THE ADDITION @ 0.5% ONLY AND MENTION OF 0.05% IS ONLY ON ACCOUNT OF TYPOGRAPHICAL MISTAKE. THEREFORE, GROUN D NO.1 (A) IS DISMISSED. GROUND NO.1(B) HAS ALREADY BEEN DISMISSED. GROUNDS NO.2 & 3 DO NOT REQUIRE ANY ADJUDICATION. IN VIEW OF THE ABOVE, AP PEAL IN I.T.A. NO. 4527/DEL/2009 IS DISMISSED. 29. AS REGARDS APPEAL IN I.T.A. NOS. 2341, 2342, 18 88 AND 1889/DEL/2011 REPRESENTING APPEALS CONCERNING PENALTY U/S 271(1)( C) BOTH PARTIES HAD AGREED THAT THESE CAN FOLLOW THE QUANTUM ORDERS. T HEREFORE, WE SET ASIDE THESE APPEALS TO THE OFFICE OF A.O. WHO WOULD PASS THE REVISED PENALTY ORDERS KEEPING IN VIEW THE QUANTUM ORDERS PASSED BY US. 30. IN VIEW OF THE ABOVE, APPEALS IN I.T.A. NOS.234 1, 2342, 1888 AND 1889/DEL/2011 ARE ALLOWED FOR STATISTICAL PURPOSES. 31. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH JAN., 2015. SD./- SD./- (H. S. SIDHU) (T.S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 30 TH JAN., 2015 SP COPY FORWARDED TO:- THE APPELLANT THE RESPONDENT THE CIT THE CIT (A)-, NEW DELHI. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. 19 ITA NOS.2341,2342/DEL/2011 I.T.A.NOS.4527,4528/DEL/2009 I.T.A.NOS.1888,1889/DEL/2011 I.T.A.NOS.4551,4552/DEL/2009 BY ORDER (ITAT, NEW DELHI). S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 22,23,27,28,29 SR. PS /PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS 30/1/15 SR . PS/PS 6 KEPT FOR PRONOUNCEMENT 30/1 SR. PS/PS 7 FILE SENT TO BENCH CLERK 30/1 SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER